Before evaluating the Brazilian stock market scenario , it is essential to turn our attention to the world's main financial center : New York and its S&P 500 stock index . When following the earnings season there , we noticed that , so far, the fourth quarter 2023 results of the main companies in the S&P 500 index have exceeded the market's average expectations.
Good news for Investors investing in Brazil?
At this stage of the season, the overall performance of the S&P 500 relative to earnings estimates is largely positive. While the proportion of S&P 500 companies reporting positive earnings surprises exceeds analyst forecasts, the magnitude of these earnings still remains within the market's predicted average. Due to companies' robust performance relative to estimates, the S&P 500 index is posting higher gains in recent weeks. This annual growth in earnings for the second consecutive quarter is excellent news for both international investors and those investing in Brazil , considering the positive correlation between these two indices.
Image 1: Correlation between Ibovespa and S&P500.
How are the profits of companies in the S&P500 this quarter?
Overall, to date, 77% of S&P 500 companies have reported actual results for the fourth quarter of 2023 . Among these companies, 69% presented EPS ( Earnings per Share ) above estimates, demonstrating positive surprises in earnings , especially led by the Information Technology sectors. The negative surprises come from the financial sector, a scenario that, although widely expected by the market due to the withdrawal of liquidity caused by the increase in interest rates , was still a negative surprise.
Now that we have seen how the investment market is going on American soil, we are ready to check how the stock market is going here in Brazil. Follow me and we'll see how the results season is going here in Brazil in the next posts.
